\u3000\u3 Shengda Resources Co.Ltd(000603) 866 Toly Bread Co.Ltd(603866) )
Key investment points
Event: the company released the first quarterly report of 2022: 22q1 achieved a revenue of 6.336 billion yuan, yoy + 6.24%; Net profit attributable to parent company: 763 million yuan, yoy-13.54%; Deduct 716 million yuan of non net profit, yoy-14.40%.
Income grew steadily, and East China may benefit from the outstanding catalytic performance of the epidemic. 22q1 bakery achieved a revenue of 1.449 billion yuan, yoy + 9.2% revenue performance in line with the previous expectations. From a subregional perspective, East China may benefit from the catalysis of the epidemic, with a rapid growth rate. East China + 33.6%, northwest + 19.2%, central China + 14.4%, South China + 11.1%, North China + 5.5%, southwest + 4.6%, northeast + 2.2%. Considering the different market development stages between East China and Northeast China, East China is still in the stage of rapid penetration of peaches and plums. After continuous layout in recent years and the launch of factories in Jiangsu last year, the growth is faster under the catalysis of the epidemic. The mature market in Northeast China is relatively stable. In terms of the number of dealers, by the end of Q1, the company had 903 dealers, a net increase of 8 dealers over the end of last year. Except for the net decrease of 3 in South China, the number of dealers in other regions remained flat or increased slightly.
The profit of raw materials + sealed freight for epidemic control still disturbs the profit. The net interest rate attributable to the parent company in 22q1 was 10.88%, with a year-on-year increase of -1.39pct; Deduct non net interest rate of 10.31%, year-on-year -0.80pct. In terms of spin off, the gross profit margin was 25.62%, with a year-on-year increase of -0.95pct, which was mainly affected by the rise of raw material cost and freight, including the negative effect of the rise of freight in the sealed area under the epidemic; In addition, the obstruction of product structure optimization under the epidemic also has an impact on the gross profit margin. The sales expense rate was 8.45%, with a year-on-year increase of -0.77pct, mainly due to the suspension of some expenses and activities promotion under the epidemic situation in Northeast and East China. The management fee rate was 2.22%, with a year-on-year increase of + 0.21pct; The R & D expense rate was 0.52%, a year-on-year increase of + 0.32pct, mainly considering the impact of salary adjustment of some personnel. The financial expense rate was 0.13%, year-on-year + 0.70pct, mainly because the company's exchange income and financial management income in the same period last year were higher than that in the current period.
Expect Q2 price increase transmission to reduce performance pressure. According to the feedback from channel research, the repeated outbreaks in East China and Northeast China at the end of March and early April had a certain impact on the company (the two regions accounted for nearly 50% of the company's revenue). On the one hand, consumer demand is strong and channel inventory digestion is fast; On the other hand, the repeated policies at the logistics end of the production and supply chain have a certain impact on the product structure and freight at the delivery end. In addition, the price increase is still in transmission, and the pressure on raw material cost needs to be alleviated by raising prices and adjusting product structure. It is expected that Q2 will alleviate the pressure on gross profit margin after the price increase is further transmitted.
Investment suggestion: the short-term bread industry still has growth. It is optimistic about Taoli to establish medium and long-term barriers and expand market share through management and supply chain. In the medium term, the company's capacity expansion in many places has been promoted step by step, and the barriers at the end of the supply chain have been strengthened; In the long run, the company can improve its profitability with scale effect after completing the layout of production bases across the country. We maintain the previous profit forecast. From 2022 to 2024, the revenue will be RMB 7.08 billion, RMB 8.05 billion and RMB 9.13 billion respectively, with the same increase of 11.8%, 13.6% and 13.4%, the net profit attributable to the parent company will be RMB 8.70 billion, RMB 1.00 billion and RMB 1.16 billion respectively, with the same increase of 13.8%, 15.4% and 15.3%, and the EPS will be RMB 0.91, 1.05 and 1.21 respectively, corresponding to the current PE of 23x, 20x and 18x, maintaining the "buy" rating.
Risk tip: the industry competition intensifies, the development of new products and channel regions is less than expected, and the risk of food safety events.
